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The United States said Friday it will allow exports of domestically produced liquefied natural gas to Japan and other countries to which it is not bound by free trade agreements, authorizing a plan to deliver shale and other gases from Texas.
Japan hailed the move as it had been asking the United States to lift a ban on LNG exports to meet its energy needs after most of its nuclear reactors were suspended following the 2011 Fukushima nuclear disaster as well as rising prices of energy imports.
The U.S. Energy Department authorized two companies under Texas-based Freeport LNG Development L.P. to export LNG to countries that are not U.S. free trade partners, affecting a project involving the Freeport group and major Japanese utilities Chubu Electric Power Co. and Osaka Gas Co.
The announcement will pave the way for the producer of low-cost LNG to export it to Japan as early as 2017, according to a project plan.
Other Japanese corporations such as major trading houses Mitsubishi Corp. and Mitsui & Co. are also involved in shale gas development projects in the United States.
The department said in a statement that the Freeport terminal in Texas is authorized to export up to a prescribed daily limit for a period of 20 years. A total of 4.4 million tons a year of LNG will be shipped to Chubu Electric and Osaka Gas.
The decision came amid concerns in the United States that an increase in LNG exports to countries that have not signed free trade agreements with it could push up domestic gas prices.
The department said it will authorize exports to non-FTA partner countries unless it finds the proposed exports will not be consistent with the national interest of the United States.
In Tokyo on Saturday, Economy, Trade and Industry Minister Toshimitsu Motegi, who recently visited the United States to call for an early approval of the exports, said, "I welcome from the bottom of my heart the U.S. approval of LNG exports."
As there are two other projects planned in the U.S. mainland that involve Japanese companies, Motegi added that he expects them to also get the green light from Washington at an early date.